Society hailed a contract that was expected to bring in at least three times
`the 1931 collections from broadcasting in purely “sustaining fees.”
`what Klauber achieved with Mil1s’s cooperation was an agreement that
`eliminated the network’s gross income from licensing fees and focused in—
`Stead on proceeds collected directly by the radio stations. It was generally
`anticipated that the chains would receive around $40 million in 1933, the
`firs: year the new contracts would be in force, and the other broadcasters
`an additional $35 million. However, the networks’ $40 million was imme-
`diately reduced by $6 million because the affiliates were paid only 15 per-
`cent of all time sales from sponsors for network programs. For example, a
`half hour on NBC’s basic Blue Network, fourteen stations, was sold for
`$2,556. Instead of three percent of that, the ASCAP fees would be three
`percent of $350, or fourteen times the twenty-five dollars each Blue Net-
`work station was credited with by NBC.
`As for the remaining $41 million, on which the society’s expectations
`were based—~$6 million paid to stations, plus the $35 million earned by
`local stations on their ownwthat figure was reduced to $25,840,000 after
`approved exemptions, deductions, and discounts amounting to more than
`40 percent, which included the cost of station representatives and advertising-
`agency commissions, cash—payment discounts, and political and other
`music-license-free programs. Three percent of this remaining figure was
`$775,000, to which there was then added approximately $660,000 in sus~
`taining fees, a grand estimated total of $1,435,000.
`Within a few weeks, Variety said that
`the music business had been
`“outsmarted by broadcasters," and some network affiliates complained that
`they had “been exploited” by CBS and NBC. NBC affiliates among the
`latter were charging from $150 to more than $550 for an hour of locally
`sponsored time for, generally, electrically transcribed programs. When they
`were connected to the network, however, they received no more than $50
`an hour. No option on their time was paid for by NBC, and when sponsors
`wished to include NBC affiliates in specific markets or regions along the
`network, separate agreements had to be made to ensure the coverage, the
`advertising sponsor being billed for any difference. Because of William
`Paley's determination to create a network that would rank one day above
`both NBC chains, the situation was different at CBS. It offered sustaining
`programing without charge of all affiliates (those of NBC paid $50 an hour
`for such feeds) in return for a confirmed option on any part of an affiliate’s
`time on the air. All income from CBS network broadcasts was shared with
`
`the participating stations after expenses had been subtracted, based on a
`schedule that varied from station to station but in every case left the major
`
`portion of income to the network.
`By 1940, according to the Mutual Broadcasting System's White Paper
`of May 23, 1941, twiligl1t—zone income, “that portion of network receipts
`
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`190
`
`American Popular Music and its Business
`
`which is not paid over to affiliate stations or credited to the network’s own
`stations, but is retained by the networks," represented about $34 million
`out of an estimated total of slightly more than $60.8 million of net network
`time sales, and of slightly less than $129 million of the entire industry’s
`total net time sales.
`
`ASCAP’s public image was deemed to be so poor during the early 1930s,
`even by the society's own directors, that negotiations were held to secure
`the services of John D. Rockefeller’s public-relations expert, Ivy Lee. Rather
`than complicate his position by such formidible competition, Claude Mills
`recommended the acceptance of a suggestion made by a newspaper—owned
`station manager that his owner and other press lords might be inclined to
`treat the society better on their pages if they were offered more advanta-
`geous contracts than other broadcasters. The most—favored—nation agreement
`prepared for newspaper stations provided Oscar Schuette and the NAB with
`yet another opportunity to point out publicly ASCAP’s traditional discrim-
`inatory practices. Nevertheless, nearly 250 stations had signed with
`ASCAP, accepting the various terms offered, by Christmas of 1932.
`Heavy drains on ASCAP reserves, made in the third quarter of 1932 by
`publishers and writers who applied for relief, had brought the society to a
`desperate point. The finance committee, made up of men of substantial
`wealth, among them Jerome Kern, Otto Harbach, and Louis Bernstein, who
`handled the society’s investment portfolio of more than a million dollars
`invested in blue-chip securities, had themselves suffered a dramatic decline
`in their fortunes and were reluctant to recommend that ASCAP sell at a
`
`loss, but conditions indicated it should.
`
`Surprisingly, even after Variety made public their error in accepting the
`networks’ exclusion of their own time-sales income, the ASCAP directors
`did not blame Mills for the blunder. He was put in charge of streamlining
`the society’s operating systems and methods, which absorbed thirty—two
`cents of every dollar taken in. A committee studying reclassification, made
`up only of Class AA and A publishers, recommended that income from
`radio be set aside in a separate fund to be divided among writers and pub-
`lishers only on the basis of performances. The proposal was immediately
`adopted by the very same men who had made it and stood to gain the most
`from it.
`
`in the summer of 1932 the thirteen leading
`After months of planning,
`music publishers, who brought out 60 percent of all new songs (Shapiro,
`Bernstein; Irving Berlin; Rernick; Donaldson; Douglas & Gumble; Leo Feist;
`De Sylva, Brown & Henderson; Harms; Witmark; Santley, Ager, Yellen &
`Bomstein, Famous; Mills Music), banned together to merge their distribu-
`tion and bookkeeping departments into a single cooperative entity, the Mn-
`sic Dealers Service. They hoped to save what they regarded as a fast-sinking
`business by controlling distribution, fixing prices, and acting in restraint of
`trade, even as their forgotten ancestors,
`the Board of Music Trade, had
`
`35
`
`

`
`1931-1940
`
`191
`
`done throughout half of the nineteenth century. Many of them believed that
`the middlemamjobber had outlived his usefulness, and considered methods
`to freeze him out of handling printed popular, standard, and production
`music by servicing the retailer directly, at the jobber’s prices. Some impor-
`tant wholesalers, who were also music publishers, would be eliminated-
`Lyon & Healy in Chicago, Sherman, Clay of San Francisco, and the Jen»
`kins Company of Kansas City—all of whom had been responsible for ex-
`tending the lines of distribution for Tin Pan Alley throughout the country,
`from its earliest days. So, too, would be Richmond, Mayer Music Supply
`and the Plaza Music Company, New York's most important wholesalers,
`who distributed hit songs only in order to sell their own publications of
`reprinted noncopyright music.
`Each member firm invested $1,000 in the MDS, but for the time being
`it was expected to operate on the proceeds from a penny added to wholesale
`prices. A twenty—five—cent was printed on all copies of popular, two-page
`songs. The wholesale price was fixed at fifteen cents, providing a uniform
`40 percent margin of profit to retailers. Harms’s production songs and im-
`ported stage music went for thirty—five cents at retail, the price the company
`had always demanded, as did similar publications by other houses. Fifty-
`cent orchestrations were sold wholesale for 37 ‘/2 cents, and the new “pres-
`tige” seventy—five—cent arrangements for forty—five cents. A ticket for a va-
`cation in Florida was given to any large retailer who agreed to deal only
`with the MDS. To remove any doubt about its future, Maurice Richmond,
`of Richmond, Mayer, was brought in as general manager.
`No increase in sheet-music sales was immediately evident, but in less
`than ninety days Richmond’s former partner, Max Mayer, filed a $1.125-
`million antitrust action against the MDS and the twenty—two publishing firms
`it represented, charging that they had combined and conspired unlawfully
`to control the sheet-music business, and had sought to eliminate him as a
`competitor. Troubling already muddied waters at the MPPA, John Paine,
`Mills’s successor as chairman of the board, was also named a defendant,
`described as the organizer, representative, and agent for the MDS.
`Immediately after Mayer v. MDS et at’. finally went to trial,
`in March
`1934, attorneys for the Warner firms and Irving Berlin’s company ap-
`proached Mayer with an offer to settle the matter in his favor in return for
`a cash payment and the promise to dissolve the MDS and restore the jobber-
`publisher relationship to its former state. Stunned by this unexpected devel-
`opment, other firms scurried to join them, offering an average settlement of
`$7,500 each. On the ninth day of the trial, only three publishers, represent-
`ing less than 10 percent of the MDS’s business, remained to fight the ac-
`tion. The jury was released, and both sides agreed that the judge’s decision
`would be binding, without any chance of appeal. His ruling came as the
`trial’s second surprise, giving MDS only a tainted bill of health. The judge
`found the uniformity of wholesale prices disturbing, tending to support the
`
`36
`
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`
`192
`
`American Popular Music and its Business
`
`belief that some form of understanding existed, but the plaintiff had not
`produced proof of its actual existence. Though he lost the suit, Mayer was
`victorious in hastening the dissolution of the MDS. Richmond immediately
`began organizing his own jobbing business to take over MDS’s functions.
`In 1933, ASCAP was forced to cancel the annual dinner instituted in
`
`1914, and rented a large hotel room for an open meeting, putting the $4,000
`to $5,000 saved into the fund for relief loans to members. Writer and pub-
`lisher checks for the first quarter were higher than they had been a year
`earlier, though only with a supplementary disbursement. They were smaller,
`however, than for the last quarter of 1932, a year when $l,8 million was
`collected, half of it from radio, but $100,000 less than for 1931. Broad-
`casters’ right by contract to delay payments for forty-five days was cited as
`a reason for the smaller checks. Not until the end of 1933 did a 10 to 15
`
`percent increase become evident.
`At the annual meeting,
`it was suggested by newcomers to ASCAP that
`the organization change its name to the American Society of Publishers,
`because of their seif—perpetuating control. Writers who had recently joined
`flayed their own classification committee for the way in which it determined
`ratings, always giving preference to the no-longenproductive old-timers.
`The constant stream of complaint led finally to the creation, late in 1933,
`of a writer review board, elected by popular vote. Many now believed that
`the SPA could do a better job of representing songwriters than the society.
`Sigmund Romberg and his fellow officers were to pursue the introduction
`of an amendment to the copyright law that would permit splitting a copy-
`right and assigning of individual rights.
`Hard times were getting harder. A number of the syndicate stores on
`which the publishers depended for large sales were forced to shut down.
`Record royalties were at the lowest point ever, but synchronization fees
`turned out to be higher, due to the $825,000 settlement of the “bootleg
`seat” tax against ERPI, which had omitted to account for their number as
`screen theaters proliferated before the Depression.
`Looking for a more prosaic and homey song to suit the times, the public
`was making hits of “Goodnight, Little Girl," “Just a Little Street Where
`Old Friends Meet,“ and “The Valley of the Moon," all of which sold
`more than 350,000 copies, rivaling the sale of the best song written in the
`past
`ten years—“Stormy Weather"—and a hillbilly song, “The Last
`Roundup,” which went over the half-million mark. But the sale of 5,000
`copies a day was not required for Class AA publishers to break even, and
`their guaranteed $35,000 ASCAP income could not stop drastic reductions
`of personnel and expenses.
`Under the new system, predicated on the number of performances, ASCAP
`found the foreign societies clamoring for money. Accustomed to a total
`census of all music performed by licensees, and not just that by radio, the
`
`37
`
`

`
`193
`
`ch society, for example, wanted a 500 percent increase from the $20,000
`it was receiving, a sum ASCAP could not afford.
`Fm"
`a lien; ite of Variety’s continued insistence that Mills, with his honey-toned
`dra:V]_pto which, one wag had it, a person could waltz, was too much a
`hayseed for ASCAP‘s sophisticated customers, Ivy Lee's polished Wall Street
`pub]ie—relations techniques proved to be even more out of place. Mills was
`“ked to take on more of the office operations and began to pay attention
`the problems of the younger writer members. To placate those who corn-
`plained, with justification, that they were discriminated against in favor of
`older members with permanent A, B, C, or D rank, a special fund of $12,500
`was set aside each quarter. It was distributed among the writers of the ten
`most-played songs for that period, which first were listed on a regular weekly
`basis by Variety on September 5, 1933. Coincidentally,
`the West Coast
`radio bandleader Meredith Willson introduced a precursor to “Your Hit
`Parade" when he played Variety’s top ten songs on weekly broadcasts from
`San Francisco. Out-of-work songwriters and song pluggers were hired to
`monitor establishments that refused to take out an ASCAP license.
`Mills’s long and close relationship with some music publishers and his
`recent concern for songwriters did little to spare him their wrath when a
`report was completed on the society’s first year under the contract he had
`predicted would bring in two million dollars. It showed only a $300,000
`gain, and that the networks had paid on only 18 percent of time sales. His
`explanation, that the Depression was reducing radio income generally, was
`contested, and the board remembered that he had advised it to reject an
`early offer by broadcasters to guarantee $250,000 more than in the previous
`year, while maintaining a higher sustaining fee than in the new pact. Tem-
`pers were defused for a time by Mills’s announcement of pending negotia-
`tions with A T & T to use its ERPI subsidiary,
`to do what it did for the
`MPPA, and collect from all radio stations. ERPI would perform the job for
`a 25 percent commission, less than the thirty-five cents out of every dollar
`currently spent. The proposition died when A T & T removed itself from
`consideration on the ground that such an association might conflict with
`other corporate interests. The music business, however, was reminded of
`Claude Mills’s easy access to the business world, where rumors flew that a
`Justice Department probe of ASCAP was being instigated by Newton D.
`Baker,
`the new NAB counsel and a prominent figure in the Democratic
`Party, then in power.
`Mills established amicable relations with Baker immediately and then
`with Baker's assistant and successor at the NAB. Both were apprised of
`Mills’s bottom line, that ASCAP would dissolve itself if it had to, under
`government pressure, leaving the networks and broadcasters the inevitable
`chaos in copyright that would follow. In discussing the situation with NBC
`officials, who considered dissolution of ASCAP the last thing they wanted,
`
`38
`
`

`
`194
`
`American Popular Music and Its Business
`
`Mills was assured that they would not support the NAB’s tax-free bureau,
`and might be amenable to maintaining a 5 percent rate throughout
`the
`decade, possibly with some taxation at the network source.
`Along with other established businesses, Tin Pan Alley was required to
`submit a code governing their trade practices, wage scales, and other af-
`fairs, intended to eliminate unfair competition, a chore that was taken up
`by John Paine and the MPPA. A tentative covenant was sent to Washing-
`ton, over the protests of member publishers who claimed that it went be-
`yond the intention of the 1933 National Industrial Recovery Act and would
`“not only squeeze the business dry of all friendly intercourse with the ex-
`ploiters of music but seriously hamper individual initiative," according to
`Variety. “Friendly intercourse” was presumably that involved in securing
`radio performances or in “greasing” sheet-music pluggers employed by the
`major chain stores and the largest retailers. Not even after the NRA and its
`blue eagle were declared unconstitutional could publishers agree on regu-
`lations that might control paying for plugs.
`Of more immediate concern to Tin Pan Alley was the interest shown by
`the SPA and Hollywood-connected music houses in revising ASCAP’s Ar-
`ticles of Association. Writers wanted an assurance written into them that
`they would share equally with the publishers in all music rights. Deter-
`mined to get a new classification to ensure them a larger share of distribu-
`tions, the Warner music group indicated that it might not renew with ASCAP
`in 1935, when the present affiliation agreements ended. It was felt in Hol-
`lywood that it might be cheaper to license all Warner music separately, or
`else buy time on the air to promote new film songs and screen musicals,
`than to operate expensive music companies under the present structure.
`Whatever the future, Warner would not countenance a change to the “ten-
`ants in common” language the SPA demanded.
`During the winter of 1933-34, Sigmund Romberg wrote a long, confi-
`dential memorandum to the SPA officers and council, dealing with ASCAP’s
`difficulties. He proposed a number of changes in the articles,
`in return for
`which SPA writers would sign renewals of membership to ensure survival
`of ASCAP for at least the next five years. Essentially, he wanted changes
`that would remove the restrictions imposed on the writer by the Copyright
`Act of 1909. As to who owned the small rights, the recognition of which
`first made it possible for ASCAP to exist and operate, he urged support of
`an amendment to the Copyright Act introduced by William Sirovich, of
`New York, which provided that “the author or composer may, to the extent
`of his ownership,
`license all or any part of the rights of such author or
`composer."
`When the memorandum was offered to the ASCAP board, there was such
`
`opposition from publishers that any significant changes were postponed. A
`temporary palliative was offered by the institution of separate classification
`review boards, elected by popular vote, whose findings would be final.
`
`39
`
`

`
`1931,1940
`
`195
`
`The publisher of many of the best-known SPA members, Max Dreyfus
`was prominent among the financial backers of the lobby working to kill the
`Sirovich bill. Ironically, a tribute to him, written by Gene Buck, appeared
`in the SPA Bulletin in which Romberg’s prescription for restoring ASCAP
`to good health first appeared in print. “One of the most outstanding music
`publishers in the history of American music," Buck called him, “primarily
`because he sensed the fundamental necessity of inspiring faith and confi-
`dence in the composer and author and realizing that his firm could only be
`as good as his writers.” After the defeat of the Sirovich bill,
`the SPA
`council gave much thought to the possibility that ASCAP might be dis-
`solved and they would have to step in and take over its licensing function
`on behalf of the writers. More than 500 authors and composers and most
`small music houses were ready to renew their ASCAP affiliation for five
`years, but the large publishing firms, chiefiy the Warner group, held out,
`fearing the vague promises in the agreement to effect changes in ASCAP’s
`distribution process and the compromise in the small-rights impasse being
`urged on them by their own most successful authors and composers.
`Meantime, the eighteen-year-old war conducted by the MPPA over the
`payment of gratuities to performers went on. John Paine was given the
`power of attorney to act for MPPA members and immediately to levy a fine
`of $1,000 on the first occasion a publisher was found giving payments or
`free orchestrations to bandleaders. A $200 fine was exacted for each suc-
`ceeding offense. One third of the money collected went to the informant;
`the remainder was for the operation of the association. The large movie-
`connected houses found little in the MPPA to warrant their participation
`and continued to remain outside the group. A new point system was intro-
`duced at ASCAP, removing the AAA classification enjoyed only by Harms,
`and the AA for the other major publishers. A performance on NBC or CBS
`was credited with one point; every use in a major motion picture, with one
`quarter. In the third quarter of 1934, Harms topped the list, with 681 points;
`Berlin was second, with 610. Jerome Kern, majority owner of the Warner
`firm that published his music, agreed to unlimited use of the songs from
`his latest Broadway production. For years he had insisted on the restriction
`of all new music for six months, but, having observed how the widespread
`plugging of his “Smoke Gets in Your Eyes” made a hit of Roberta despite
`unfavorable notices, he had become an avid reader of Variety’s most-played
`list. The song was seventh on the year’s recapitulation of network plugs,
`and ninth of the ten songs that received one tenth of all performances on
`NBC and CBS and were published by houses owned or associated with
`Hollywood.
`When the Mayer v. MDS lawsuit was settled, the plaintiff, Max Mayer,
`had turned over to the Federal Trade Commission the evidence purporting
`to prove the interlocking interests of ASCAP,
`the MPPA, and the MDS.
`The split between the networks and their affiliates and the majority of the
`
`40
`
`

`
`196
`
`American Popular Music and Its Business
`
`initially springing from economic differences, now extended to
`business,
`fixed opposing positions on music licensing. The chains feared dissolution
`of ASCAP, though each felt the society was in technical violation of the
`law, but most members of the NAB wanted it put out of business. In re-
`sponse to countless complaints from broadcasters, the Justice Department’s
`antitrust division engaged in an investigation of ASCAP that began in 1933.
`On August 31, 1934, a formal complaint was filed in the New York
`District Court, charging ASCAP, all its 778 writers and 102 publishers, the
`MPPA, and the MDS with having interlocking directorates and agreements
`in a conspiracy to monopolize the music business. A perpetual injunction
`was sought to terminate agreements between the defendants and also with
`record companies and broadcasters. The MPPA board resigned immedi-
`ately, but was replaced by other officers of the dominant member firms who
`remained on the ASCAP board.
`
`The rush to trial was attributed by Tin Pan Alley and its lawyers to the
`approaching NAB convention, at which, as always, ASCAP would be the
`principal topic of discussion, and a possible conflicting action by the 15,000
`motion-picture owners just before the expiration of their ASCAP contracts.
`After having postponed it several times, to keep the board united, ASCAP
`offered_a new seat-tax agreement for the first time since 1917, which was
`expected to bring in as much as an additional four million dollars.
`The first effect of the government suit was the hasty compromise with
`the theater operators, arranged by Buck and Mills, which called for only a
`50 percent increase in fees and much less in actual income. This was fol-
`lowed by a forty-two page reply to charges. Just before New Year’s Day
`1935, the society’s veteran legal adviser, Nathan Burkan, went on a vaca-
`tion,
`leaving behind an ASCAP management and board confident of the
`successful outcome of the trial, though faced with mounting problems on
`the Warner front.
`
`the
`After a game of golf with William Paley of CBS, Harry Warner,
`operating head of the giant film company built by him and his brothers,
`was determined to make at
`least a million-dollar annual profit from the
`music business. Commenting of CBS’s most recent balance sheet, Paley
`had attributed much of its profits to musical programs like that he had cre-
`ated starring Bing Crosby. The task of increasing Warner’s ASCAP income
`was given to Herman Starr, Warner Brothers treasurer, who came to the
`business in 1920 as an accountant and, when the company was incorporated
`in 1923, was elected a director and assistant treasurer. Three years later, he
`organized the first Warner companies in Europe. In 1926, he moved to First
`National Pictures, as president and director, but when it was merged with
`Warner four years later, he became a vice—president of the combined firms.
`He was made president of the recording, radio-set manufacturing, and mu-
`sic division of Brunswick, Balke, Collender when it was acquired in 1930.
`Starr put Jack Kapp in charge of recording activities. After Herbert Yates’s
`
`41
`
`

`
`197
`
`entire Brunswick record business, he was elected president
`-Hg Brunswick Radio Corporation, a Warner subsidiary until
`..
`-
`It) fcllhlllltl was sold to Kapp. It is doubtful that Kapp would have been
`- ‘vluillldlthe new Decca Record Company without Starr's support and
`1.”;
`rovided to Brunswick‘s rusting pressing equipment, o1d-fash-
`Ilvl “"6655 If Ii): was. A testy, domineering man, remembered by those sur-
`ioned tltollaifliters who dealt with him as possessing a long memory where
`'
`_g§0£:l.e concerned, Starr instructed Warner representatives on the
`€"°"f'c:' b Md among them Buddy Morris, the operating head of the Music
`.r\5CJ"tl
`0‘
`‘ding Corp, that they should proceed on the assumption that
`Plmlishcrs H01
`f the societ
`at the end of 1935 unless its share of
`Wnrntll‘ W0"ld 1”” 0"“ 0
`y
`llighcf distributions was greatly increased.
`[mill
`intensive drive was launched to obtain at least part of the renewal
`._m'_: of songs written in the years 1910 through 1913, so that Warner
`"l M clrtim their performing rights, and an employee was settled in Wash-
`mu
`( omb the copyright registration files. To increase the use of War-
`ington to c
`] comedies and operettas, fees for radio use were substantially
`ner mustca
`mgr];-ccl. This use fell under Warner’s grand rights, never yet defined by
`me ,_-mu-ts, though the music business claimed that the performance of three
`or more selections from a stage work, with some of the dialogue and nar-
`ration tying the songs together constituted a grand right. This was not cov-
`crctl by any ASCAP license or agreement. Without any variation, the same
`principle was applied in licensing electrical transcriptions—the twenty-five
`cents for four minutes of radio use.
`Mills, Buck, and a majority of the ASCAP board members made stren-
`uous efforts to keep the Warner firms, offering to compromise on the re-
`newal contract, removing Mills as the sole and final arbitrator of differences
`over publisher-distribution values, and conveying their belief that the SPA
`would eventually be brought into the fold on the “tenants in common”
`argument. Starr would not budge, and because they believed that ASCAP
`might be dissolved should he prevail, most publishers signed the five—year
`renewals. The film publishers did not, even though all television rights were
`excluded, because they insisted that grand, and not small, rights were in-
`volved. Starr’s resolve was strengthened by a sound defeat at the annual
`meeting of an amendment to the by-laws instituting elections by popular
`vote.
`It was sponsored by the Warner firms and supported by Hollywood
`song~.vriters, many of whom had what appeared to them to be a permanent
`I! rating.
`Mills and Buck then went to Los Angeles to placate the writers and lure
`hack Jerome Kern, who had resigned from the ASCAP board to protest the
`tlcfcat. While there, the pair met with Harry Warner, who told them that
`he would leave the society unless ASCAP distributions were based com-
`Plctcly 011 performances, as was done by the British society. It was evident
`that the die had already been cast. To obtain the million dollars a year he
`
`42
`
`

`
`198
`
`American Popular Music and Its Business
`
`wanted, Warner required $2.5 million annually: $1 million for writers,
`$250,000 for collection expenses, and the balance for profit, clearly more
`than the entire $2 million being collected for 1935, of which Warner would
`get $360,000, with an additional $40,000 from the MPPA for electrical
`transcriptions. The movie magnate did not mention that he was also talking
`to Paley about a sale to CBS of all Wamer’s music houses. There was
`substance to rumors from Washington that Warner lawyers were seeking a
`separate consent decree for the company in the antitrust suit against
`ASCAP,
`in order to begin separate music licensing. To that end, negotia-
`tions were instituted with the two major networks to license the Warner
`catalogue, which represented 40 percent of the ASCAP repertory and 80
`percent of all Broadway musicals written in the last several decades. Starr
`made clear that there would be no last-minute reconciliation without a vic-
`tory, when he took over from Morris on the ASCAP board and immediately
`demanded an accounting of all income, expenses, and royalty distributions
`since 1925, down to Mi1ls’s expense accounts.
`At the semiannual membership meeting in October, Burkan warned that,
`in his opinion, 70 percent of the writers on Hollywood payrolls had con-
`tracts that signed away all rights,
`including that of public performance.
`Only Berlin, Kern, Romberg, and Youmans were in a position to reserve
`both grand and small rights. Although a standard clause in producer-
`songwriter contracts recognized that the performance right was subject to
`an agreement with ASCAP, Burkan said, when the present affiliation agree-
`ment expired, producers could regain ownership of the right and add it to
`the mechanical rights they already controlled. The issue had not been tested
`in an American court, but in a single case in England the court found for
`the writer. The Hollywood contracts were subject to the publishers’ mem-
`bership in ASCAP, an advantage on which Starr based his right to with-
`draw.
`While Mills was conferring with the NAB about a new contract to begin
`in 1936, he was also negotiating with the networks. The revelation of their
`decision to renew with ASCAP, at a steady 5 percent for five more years,
`came as a bombshell to most broadcasters. The sudden recess of the gov-
`ernment suit after only nine days made it clear that the case was on shaky
`ground, and that it was only a matter of time before it would be dropped.
`With only Warner as an alternative, and succumbing to pressures from the
`IRNA, many broadcasters signed, reluctantly. Diehards, however, took ad-
`vantage of the ninety—day provisional contract offer by Warner, and began
`to exclude ASCAP music,
`in order to force Mills to come up with an ac-
`
`ceptable per-piece arrangement.
`The entire Warner group resigned officially in early December, leaving
`other film publishers in a quandary about their own future action. A final
`olive branch was held out to them by ASCAP with the installation of a new
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`method of payment: a 50 percent distribution based on performances, and
`the balance based on availability-seniority. The holdout firms were told pri-
`Varely that without them the society would have to turn over everything to
`the songwriters and the SPA. That possibility was too dreadful to contem-
`plate, and a united writer and publisher front existed on New Year’s Day.
`Despite his earlier judgment, Burkan was ready to defend the networks in
`case of infringement suits, now proceeding on the theory that Warner’s
`music was licensed by ASCAP through the songwriters.
`Pay for air play was taking its dreadful toll
`in 1936 of publishers and
`songwriters. Not new to the business, of either classical or vernacular mu-
`sic, payola was omnipresent and international. In England, a standard price
`of two pounds prevailed for the introductory performance of a song on the
`BBC, and one pound for each subsequent playing. It was customary, too,
`for a publisher to pay all musical and talent costs when his music was
`recorded. In the United States, neither the MPPA, the FTC, nor organized
`contact men——once known as “song pluggers”—were able to halt its per-
`vasion of Tin Pan Alley. It cost at least $1,000 to start a song on its way
`to the top of the Variety list, or to the number-one spot on “Your Hit
`
`Parade.” The star vocalists on radio and the big bandleaders with commer-
`cial shows had their own private arrangements with the music houses—-
`being cut in on songs as co-writers and getting free baseball or football
`tickets or lavish gifts of clothing, liquor, women, and, always, free orches-
`trations. When the New York mu